Netflix Revenue Rises 16% in Q4, Expands Theatrical Strategy with Gerwig’s Narnia Deal

Netflix closed 2024 on a high note, reporting a 16% year-over-year revenue increase in Q4, reaching $10.25 billion—beating expectations of $10.11 billion. The streaming giant added 19 million paid memberships in the quarter, marking its largest-ever quarterly gain and bringing its global subscriber base to 302 million.

The company’s operating income saw a significant 52% year-over-year jump to $2.27 billion, with an operating margin of 22%. Earnings per share more than doubled to $4.27 from $2.11 in Q4 2023. Additionally, free cash flow for the quarter stood at $1.4 billion, reinforcing Netflix’s strong financial position.

Pricing Strategy and Revenue Growth

Netflix’s ability to increase subscription prices without major churn continues to underscore its dominance in the streaming space. The company raised the U.S. Standard plan from $15.49 to $17.99 per month—the first hike in three years—while the Premium tier will go from $22.99 to $24.99 increased by $2. The ad-supported plan also saw a price bump from $6.99 to $7.99. Similar adjustments were made in Canada, Portugal, and Argentina.

Despite price hikes, the ad-supported tier gained traction, accounting for 55% of sign-ups in markets where available. Ad-tier memberships surged nearly 30% from Q3, signaling growing consumer interest in Netflix’s evolving revenue model. Analysts project ad revenue will become a major contributor by 2026 as Netflix strengthens targeting capabilities and expands its first-party ad tech platform, set to roll out in the U.S. in April 2025.

Netflix’s Q4 content slate fueled significant engagement, with standout hits such as Squid Game Season 2, the record-breaking Jake Paul vs. Mike Tyson boxing match, and exclusive Christmas NFL games. The company’s expansion into live events—including partnerships with the NFL and WWE—highlights a strategic push into premium programming traditionally dominated by broadcast networks.

Looking ahead, Netflix has reiterated that its live sports strategy focuses on special event programming rather than acquiring rights to major seasonal sports leagues. However, analysts suggest this stance may evolve as Netflix continues to refine its live content offerings.

Netflix also marked a significant shift in its film distribution strategy with the deal for “Narnia”, directed by Greta Gerwig, signaling a new approach to theatrical releases. For the first time, the platform will offer a four-week exclusive theatrical window, with the first two weeks in IMAX globally, before the film debuts on streaming. This distribution model, akin to that of major studios, represents a test for Netflix, which has previously limited theatrical releases to awards-qualifying runs. The strategy reflects the growing importance of theatrical marketing in building awareness for titles in an increasingly competitive landscape.

Source: Emarketer